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Thursday, September 5, 2013

D.C. attorney general takes new aim at gas mogul Joe Mamo

Joe Mamo, owner of Capitol Petroleum Group, is back in the city government’s crosshairs. (Mark Gail/The Washington Post)

More than a year after abandoning an antitrust probe of the District’s largest owner of gas stations, D.C. Attorney General Irvin B. Nathan has filed suit against companies owned by Virginia businessman Eyob “Joe” Mamo using a new legal tactic in a bid to lower gas prices in the city.
The lawsuit filed Tuesday in D.C. Superior Court alleges that “exclusive-supply agreements” between Mamo’s gasoline wholesaler and the independent dealers who operate Mamo-owned stations violate District laws regulating the gas retailing industry. ExxonMobil is also named as a defendant in the case, as it established the agreements in question before selling 29 stations to Mamo in 2009, and can still enforce them through its supply contracts with distributors.
Mamo’s companies have exclusive supply agreements with roughly 60 percent of the 107 gasoline retailers operating in the city, the lawsuit says. “As a result of these agreements, the [Mamo companies] set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents and others … of the benefits of competition,” the complaint charges.
Mamo has long protested that his prices are reasonable, that exclusive-supply contracts are the industry “norm” and that he has been scapegoated for rising global oil prices. He said in a statement Tuesday that the exclusive-rights agreements are “legitimate” and “similar to operating agreements and dealer arrangements in jurisdictions across the country.”
“We will defend against these allegations and look forward to finally bringing this matter to an end,” the statement added.
A call to ExxonMobil’s Dallas media relations bureau was not immediately returned.
The lawsuit puts Mamo, a frequent campaign contributor, back in the public eye after he avoided the antitrust prosecution and managed to kill a D.C. Council bill last year that would have put significant curbs on his business model.
Council member Mary M. Cheh (D-Ward 3), who sponsored that bill, said she was “delighted” to hear the city had taken action under the existing law. “He’s been manipulating the market for a very long time, and I hope they’re able to straighten things out,” she said.
Nathan said in a statement that the suit “seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”http://www.washingtonpost.com